Pay as you go workers’ compensation insurance is increasing in popularity in the business world. Eliminating up-front costs and outdated payment methods are two of the biggest reasons businesses are turning to pay as you go for workers’ comp insurance. Another large benefit is not having to deal with audits. The cost and time typically spent on audits is no longer a factor. Find out more about workers’ compensation insurance rates.
With just a little digging online, you’ll likely find dozens of providers offering workers’ compensation insurance on a pay as you go basis. In doing your homework be sure to keep this in mind:
Pay as you go workers comp is simply an alternative way of making your premium payments. It’s not different insurance, and it doesn’t replace your workers comp insurance or your responsibility to pay premiums, collect/issue certificates of insurance from subcontractors, etc. Your coverage must still be provided through a state-approved workers comp insurance carrier or approved self-insured source.
With that said, there are compelling reasons for small businesses to consider the pay as you go method of paying workers’ comp insurance costs. You can learn about a few of the major ones in this module.
With pay as you go, you don’t have to make a large, cash-flow-killing down payment up front. You can buy workers’ compensation insurance with little money down, and then pay your premium in smaller amounts spread over the course of the year.
When it comes to workers’ compensation insurance, there’s certainly something to be said for convenience. With pay-as-you-go, working with your existing payroll service provider and/or tax administrator to pay a single bill each pay period by combining your workers’ compensation premium with your payroll.
This is often quoted as the biggest benefit to pay as you go workers’ compensation insurance: the ability to avoid a large, cash-flow-killing down payment up front. You can purchase a policy with little money down, and pay your premium in smaller amounts spread over the course of the year.